New AIM admission: Artisanal Spirits

Andrew Hore
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New AIM admission: Artisanal Spirits

The Artisanal Spirits Company owns the Scotch Malt Whisky Society (SWMS), which has 28,300 members around the world. The placing price was at the bottom of the 112p a share to 121p a share price range.
Online sales continue to grow, offsetting the understandably weak performance from venues. International sales grew despite disruption from the UK leaving the EU. The second quarter should benefit from the removal of US tariffs – the additional cost was absorbed by the company.
Management believes that the company has the ability to more than double revenues to up to £40m in 2026. The craft spir...

Director dealings: Emmerson

Andrew Hore
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Director dealings: Emmerson

Potash mine developer Emmerson (LON: EML) non-executive director Edward McDermott has bought 775,000 shares at 5.12p each. That £39,680 investment takes his stake to 1.25 million shares.
Since February, when £5.5m was raised at 5.75p a share and the subsequent announcement of a move from the standard list to AIM the share price has declined. Management believes that AIM offers more flexibility when it comes to funding and other transactions.
The share purchase appears to be taking advantage of that share price decline and it appears to have helped the share price recover from 5.15p to 5.7p in ...

New Aquis admission: TECC Capital

Andrew Hore
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New Aquis admission: TECC Capital

TECC Capital is a new shell that is seeking to buy technology or cannabis businesses. There is a wide list of potential sub-sectors that will be considered. It is broadly a list of the current fashionable sub-sectors.
Management is not seeking a business that is losing significant amounts of money, they want it to be near to cash generation at least. One of the areas that is highlighted is e-commerce.
The directors have been involved in the AIM reversals of Bidstack and BrandShield Systems. One of the residual investments held by BrandShield is a 10.7% stake in WeShop, which has developed an e...

IAG share price: Gallego would ‘participate in’ future consolidation

Liam Roche
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IAG share price: Gallego would ‘participate in’ future consolidation

IAG Share Price

The IAG share price (LON:IAG) held pretty steady over the past three months, amid uncertainty over the UK’s travel restrictions. However, in the last two days it dropped by nearly 13p a share to 196.52p. The move came as news emerged that Portugal, one of Europe’s major holiday destinations, was being removed from the green list. Since the beginning of the year the IAG share price is up by 23.2%. While many were expecting more countries to turn green than to go the other way, now is an ideal time to reassess the IAG share price to see what the future may hold.

Consolidation

The British Airway owner revealed in May that its passenger capacity during the first quarter was at around 20% of the level in 2019, before the pandemic. This does not bode well for the company which already made a loss before tax of £1.6bn this year. IAG may need to seek alternate strategies to combat rising costs.

The IAG chief executive Luis Gallego believes the company should look to merge assets. According to Gallego, there may be only two or three airlines per continent in the coming years. Additionally, while passenger numbers are expected to eventually return to normal, business travel is unlikely to fully recover. A significant portion of IAG’s revenue comes from this sector.

In Gallego’s view this could lead to further consolidation, which the IAG would “participate in”. Gallego’s willingness to act in this way could serve to secure the IAG share price in the future.

Portugal off Green List

Shares in major travel companies plummeted yesterday as the UK government removed Portugal from its green list of safe destinations. The government’s decision to change Portugal’s status to amber means those traveling will have to do a ten-day home quarantine on their return.

The news caused shares in the entire airline industry to plummet, and created uncertainty over the future.

Chief executive of the Business Travel Association, Clive Wratten, told The Times that the government’s ruling effectively meant the UK had essentially closed its border. “It is a devastating day for the travel industry as a whole. Removing Portugal from the green list will destroy any confidence in international travel, whether for work or leisure.”

The possibility of travelling to Portugal throughout the summer gave hope to the IAG share price and travellers alike in an otherwise dreary summer season. The traffic light system was first put into place on May 17 when international leisure travel resumed. Now that Portugal is being removed from the green list, only 11 countries will remain. There is no clarity over when major holiday destinations will be added to the green list.

Give big data another chance

Jon Levinson
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Give big data another chance

Rosslyn Data Technologies, (LON: RDT) has reported a trading update for the year-ending April 2021. It shows despite Covid handicaps a  4% increase in revenue to £7.4m, although an  EBITDA loss  of £250k, compared to a small profit (£36k)  as spending on sales and marketing is increased. This cloud-based big-data analytics platform is still looking for the most profitable users and usages.  It provides analytical services by combining four key technologies: bulk data extraction; cleansing; enrichment; and visualisation, all through a single cloud platform enabling...

US nonfarm payroll below expectations despite adding 559,000 jobs in May

Liam Roche
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US nonfarm payroll below expectations despite adding 559,000 jobs in May

America labour market strengthens amid shortage of workers

Nonfarm payrolls in America jumped by 559,000 in May, the US Bureau of Labor Statistics revealed on Friday.

The reading fell short of the market’s expectation of 650,000.

The figures are well up from the 278,000 recorded in April, which was revised from 266,000.

The rate of unemployment in America fell from 6.1% to 5.8% over the same time period.

The figures suggest the labor market has strengthened despite fears that a shortage of workers were keeping the economy held back.

US nonfarm payrolls were announced as the US economy appears to be rebounding strongly as restrictions are eased. Additionally, concerns remain over the possibility of inflation.

Robert Alster, CIO at investment management firm Close Brothers Asset Management comments: “The Fed and market alike have been waiting for this nonfarm print with bated breath. April’s figures were a shock, coming in at a quarter of the expected increase despite stellar economic growth and otherwise-positive employment data. Now we are seemingly back on track, and signals are pointing towards a bright future for the US.”

“But there are still some key questions to be answered. There are vacancies in the US job market, and as people return to the workforce it’s unclear why those vacancies are not being filled. At best, it’s simply a matter of time. At worst, there’s a mismatch between the labour needed and the labour available.”

“As firms like McDonalds and Walmart increase wages to tempt workers back faster, it adds fuel to the US’ inflationary fire. While a rise in disposable income and consumer spending would be positive, if wage growth prompts a persistent increase in inflation then the Fed may be forced to step in with a monetary fire extinguisher, risking dampening the recovery before it’s really begun.”

Many businesses have been struggling to find employees as demand picks up with many offering higher wages in an effort to lure workers in.

Jobs figures in March came in below expectations, leading to concerns over labour shortages and the subsequent impact on the US economy’s recovery.

The May report from US Bureau of Labor Statistics comes as the Fed will again put its spotlight on its monetary policy, where it may consider easing some of stimulus measures since the beginning of the pandemic.

Construction sees biggest rise for seven years amid housing boom

Liam Roche
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Construction sees biggest rise for seven years amid housing boom

IHS Markit’s Construction PMI reaches 64.2% in May, above economists’ expectations

The construction sector grew at its quickest rate in close to seven years last month as the easing of lockdown restrictions caused a surge in new orders.

The IHS Markit’s Construction Purchasing Managers’ Index expanded by 0.6% to 64.2% in May, reaching its highest point since September 2014.

It also surpassed economists’ expectations of 62.3. Any recording higher than 50 is a sign of growth.

Growth was particularly strong in housebuilding, as house prices soared by more than 10% during May on an annual basis.

Housebuilding was followed by commercial jobs which saw its strongest level of growth since August 2007.

“UK construction companies reported another month of rapidoutput growth amid a surge in residential work and the fastest rise in commercial building since August 2007,” Tim Moore, economics director at IHS Markit, said.

Pressure on costs also intensified for construction firms at the fastest pace since records began, following a jump in supplier delivery times.

“Despite severe challenges with materials availability, construction firms remain highly upbeat about their near-term growth prospect,” Moore said.

Additional data is showing that Britain is on a path for a strong rebound in growth. Other surveys for the manufacturing and services sectors are suggesting that the UK economy is now partaking in broad-based growth.

The all-sector PMI, a combination of the PMI surveys for construction, manufacturing and services, jumped by 2.2% in May, its highest ever recording.

Employment growth in the construction industry remains at its highest level since 2014, as demand for staff reached record highs in May.

On the other hand, Howard Archer, chief economic advisor to the EY ITEM Club, gave a warning about what the data could mean: “Stretched supply chains and rises in raw material prices led to input prices rising at the fastest rate in the survey’s history of just over 24 years.”

“This will undoubtedly add to mounting inflationary concerns.”

New car sales on the rise but remain 15% down on pre-pandemic levels

Liam Roche
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New car sales on the rise but remain 15% down on pre-pandemic levels

Hybrid earned nearly 13.8% of this year’s new car market

Demand for new cars fell by 14.7% in May compared to the same month in 2019.

The Society of Motor Manufacturers and Traders (SMMT) revealed that 156,737 cars were registered in the UK last month.

The figures show an increase of nearly 675% from May 2020 when showrooms were forced to shut down as the first lockdown came into effect.

Since the beginning of the year total registrations are still down by 29.1% compared to the average between 2010 and 2019.

SMMT chief executive Mike Hawes said: “With dealerships back open and a brighter, sunnier economic outlook, May’s registrations are as good as could reasonably be expected.

“Increased business confidence is driving the recovery, something that needs to be maintained and translated in private consumer demand as the economy emerges from pandemic support measures.

“Demand for electrified vehicles is helping encourage people into showrooms, but for these technologies to surpass their fossil-fuelled equivalents, a long-term strategy for market transition and infrastructure investment is required.”

Hybrid vehicles are making up ground, earning 13.8% of this year’s new car market, an increase of 6.6% from the same point a year ago.

“But for these technologies to surpass their fossil-fuelled equivalents a long-term strategy for market transition and infrastructure investment is required,” Hawes said.

James Fairclough, chief executive of AA Cars, told The Times: “The new car market has burst back into life and sales in May were up substantially on April’s figures as buyers once again flocked to showrooms across the UK. With lockdown restrictions set to be eased even further in late June many prospective buyers will be keen to choose a vehicle that will enable them to enjoy a summer staycation in the UK, or just to travel to see family and friends across the country.”

“It may take some time for sales of new cars to return to their pre-pandemic levels, as many drivers continue to be drawn primarily to the used market, which offers affordable price points and plenty of choice,” Fairclough added.

The battery electric vehicle market saw a fall from 12% last May to 8.4% in 2021.

Rio Tinto appoints first Aboriginal director after sacred cave destruction

Liam Roche
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Rio Tinto appoints first Aboriginal director after sacred cave destruction

Rio is striving to improve its perception across the world after it blew up the Juukan George rock in Western Australia last year

Rio Tinto, the FTSE 100 mining group, has appointed its first ever indigenous Australian to its board as it deals with the aftermath of its destruction of a nearly 50,000-year-old sacred site in 2020.

The iron ore-focused miner said on Friday that Ben Wyatt, the former Australian minister of Aboriginal Affairs, would bring about expertise in public policy, regulation and trade upon joining the company on the first day of September.

“I was deeply saddened and disappointed by the events at Juukan Gorge but I am convinced that Rio Tinto is committed to changing its approach to cultural heritage issues and restoring its reputation,” Wyatt said.

Rio is striving to improve its perception across the world after it blew up the Juukan George rock in Western Australia last year, leading to investors and board members to variously express their disapproval.

Rio Tinto’s chairman Simon Thompson said: “With family links to the Pilbara and an impressive track record in public life, Ben’s knowledge of public policy, finance, international trade and Indigenous affairs will significantly add to the depth of knowledge on the board at a time when we are seeking to strengthen relationships with key stakeholders in Australia and around the world.”

Approximately 90% of the mining company’s profits come from its iron ore production in the Pilbara.

Prior to entering state parliament in 2006, Wyatt has worked as a solicitor and a barrister.

The Rio Tinto share price (LON:RIO) moved sideways on Friday and is currently valued at 6,166.00p.

Foxtons to expand outside of London

Liam Roche
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Foxtons to expand outside of London

Foxtons’ focus on London is now holding the group back

Foxtons (LON:FOXT), the London-based estate agent, has announced its new strategy as it looks to gain from the property sales boom.

The firm told its investors on Thursday that it intended to expand beyond the London market, by targeting sales across the south-east, in addition to other UK cities.

Foxtons is also targeting the build-to-rent sector. It is doing this by buying small lettings companies, including the purchase of competitor Douglas & Gordon for £14.25m.

While it once provided the group with an edge, Foxtons’ focus on London is now holding the group back.

Over the past ten years, house prices have taken a hit and sales have slowed in the capital, specifically in the more expensive areas where Foxtons operates.

Since 2014, the Foxtons share price has tumbled from just under 400p to just below 60p, its level today.

The Financial Times reported that Catalist, an activist investor which owns 2% of the company, believes the estate agent has “lost its way”.

Catalist added that Foxtons had been outperformed by competitors in London, and that it had stalled over the past five years.

However, the analyst reckons Foxtons could become a £1bn company if it expands outside of London. At present, the estate agent’s market cap is around 20% of that level.

In a show of optimism, Foxtons said it expects to deliver H2 profits ahead of its levels before the pandemic on rising demand in London.

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